Sprint Punts on RIM's PlayBook

Research In Motion's (NAS: RIMM) PlayBook tablet suffered another blow as Sprint Nextel (NYS: S) announced that it has canceled plans to sell a WiMAX-enabled version of the device. However, RIM responded to the news by saying that it is focusing its resources on LTE devices and international markets.

Sprint was the first U.S. operator to announce support for the device. In January, the carrier said it would sell a WiMAX-enabled version sometime this summer. However, in April, rumors spread that Sprint was postponing the launch indefinitely.

"It's an interesting concept; it just hasn't caught on with business customers," Paget Alves, president of Sprint's business markets group, told The Wall Street Journal in explaining Sprint's decision not to carry the PlayBook. He added that the tablet space is already crowded. Sprint noted that competition in the markets has increased from the likes of Motorola Mobility's (NYS: MMI) Xoom and HTC's Evo View tablets.

In response to Sprint's announcement, RIM said it has decided to prioritize and focus its 4G development resources on LTE. "We remain excited and committed to delivering innovative and powerful 4G tablets to the U.S. market together with our carrier partners," the company stated. "Testing of BlackBerry 4G PlayBook models is already under way and we plan to enter labs for network certifications in the U.S. and other international markets this fall."

So far, RIM has not secured any U.S. operator for a cellular-enabled version of the PlayBook. Verizon Wireless has not committed to selling the PlayBook, and AT&T Mobility offers a Wi-Fi-only version of the PlayBook for a base price of $499. However, RIM's statement indicates that the company may be getting support from U.S. operators for a LTE-enabled version of the tablet. Verizon (NYS: VZ) has launched LTE, and AT&T (NYS: T) is planning to do so this summer.

A small bright spot for RIM: In July, after months of delay, AT&T announced that it would allow customers to access RIM's BlackBerry Bridge software, which allows PlayBook users to connect their tablet to their BlackBerry smartphone.

RIM launched the PlayBook in April, but the gadget met with tepid reviews. During RIM's fiscal first quarter, the company said it shipped 500,000 Wi-Fi enabled PlayBooks. Apple sold 9.3 million iPads during the same period.

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